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Talks on Illinois pension crisis end without deal

By Associated Press SARA BURNETT

Jan. 5, 2013

AP

Caption

A “Pension is a Promise” sign is seen as Illinois state union members and supporters rally in support for fair pension reform Thursday at the Illinois State Capitol in Springfield. Gov. Pat Quinn announced Friday what could be a significant advance on pension reform, saying House Speaker Michael Madigan was willing to forgo the dicey issue of teachers retirement costs in order to fix the worst-in-the-nation pension deficit.

CHICAGO (AP) — Despite setting aside a major sticking point, Gov. Pat Quinn and legislative leaders failed to agree Saturday on the outlines of a deal that might begin to solve Illinois' massive pension crisis, the worst of any state in the country.

Coming out of the meeting, which lasted less than two hours, leaders from both parties said they better understood one another's positions but that there were still many obstacles to producing a proposal to take to lawmakers before the end of the current General Assembly on Wednesday.

"I'm just anxious to pass a bill," said Democratic House Speaker Michael Madigan, who has agreed to drop for now his proposal to shift pension costs for public school teachers from the state to local districts, an idea that has been a major point of disagreement in negotiations.

"I think that we ought to find a bill that we can all agree upon and pass that bill. Unfortunately there are still differences among the participants."

Madigan said he believes a deal is still possible before Wednesday, and he and Quinn spokeswoman Brooke Anderson said talks would continue until the end of the session.

"We're going to just keep working until we get it done," Anderson said.

Decades of inattention to saving up for state workers' retirement plans, including years where legislatures and governors skipped payments, means the state's five pension accounts are short $96 billion. The piling debt has hurt the state's credit rating, limiting its ability to borrow. It has also threatened to eat up more and more money for education and other public services.

Madigan's compromise, announced a day earlier and praised by Quinn as a breakthrough, would eliminate — for now — one of the reasons reform efforts collapsed in last spring's legislative session. Chicago schools already shoulder pension costs for their teachers, but Republicans worried that forcing the rest of Illinois to follow suit would result in higher property taxes.

Various plans floated in the last year have included bumped-up contributions and less-generous rewards for current employees, raising the retirement age and reducing cost-of-living adjustments for retirees.

Democratic Senate President John Cullerton has said he wants lawmakers to pass a more modest alternative that the Senate adopted last spring. That proposal affects only a portion of the workers and retirees but would be a starting point, and Cullerton is concerned that more ambitious efforts could be unconstitutional.

Afterward, spokesman Ron Holmes noted Cullerton also has agreed to delay the issue of shifting costs for teacher pensions.

"He urges the House to take bipartisan action on a pension reform proposal in the coming days," Holmes said.

Radogno said she wasn't married to any particular framework, but that "we still obviously have a long way to go."

Cross left the meeting without speaking to reporters.

Among the remaining obstacles in negotiations are differences over cost-of-living adjustments for employees and retirees, asking workers to pay more, which approach the courts could consider constitutional and whether to include provisions to help Chicago with its pension crisis.

Quinn, a Democrat, has called the pension issue Illinois' "own fiscal cliff." He is hoping lawmakers pass and send him a reform bill on Tuesday, before the Legislature's lame-duck session ends.

But like the deal between the White House and congressional Republicans to avert the fiscal cliff, any Illinois pension deal in the short term will leave significant disagreements to be wrestled over down the road.

Illinois' pension deficit has been growing by $17 million per day, threatening to eat up more and more money for education and other public services. It's also costing taxpayers millions more because of the state's low credit rating.

The House convenes Sunday with plans to work until Wednesday morning. The Senate adjourned abruptly Thursday night but Cullerton cautioned senators to be ready for a call to return Tuesday if action is needed on any legislation.